News from Hiring Source



Economic Update

The forecast for 2010 is for job growth late this year. The Houston metropolitan area posted a net loss of 92,500 jobs, or 3.5%, from December 2008 to December 2009 per Texas Workforce Commission. The forecast for 2010 shows job losses continuing through midyear before turning upward in Q3 ending the year with a 0.1% net gain. Houston was among the last major U.S. metro areas to enter the current recession, shielded for several months by high & rising energy prices in 2008. The few industries that managed job growth in 2009 continue to grow in 2010 which include education, healthcare, leisure/hospitality, and government. Because Houston’s recovery depends on economic recovery elsewhere in the nation and abroad, the forecast sees local growth returning in the 3rd quarter yielding an over-the-year gain near year-end.

The number of companies reporting over-the-month staff reductions exceeded that reporting expansions by 21% per Workforce Solutions. Because employment is a lagging economic indicator, this situation isn’t unexpected. When a recovery begins, employers typically respond by increasing hours worked. As that tactic approaches its limits, the next step is often to add temporary workers. Only when demand is firmly entrenched do employers being to add permanent employees – something expected in the latter half of this year.

While Houston continues to experience job losses now, unemployment claims activity suggests that a bottom is near. Both initial and continuing claims for unemployment benefits in the Gulf Coast Workforce Development Area are trending downward, according to Workforce Solutions. Three month averages show that initial claims have fallen 13.8% from the recent peak in May 2009 while continuing claims have dropped 13.5% from the recent peak in August.

According to the latest job numbers released by the U.S. Bureau of Labor Statistics, temporary help employment increased by 2.5%. While several sectors of the economy continued to lose jobs, although at a slower pace, temporary help services was one of the few industries that continued to add jobs during this period. BLS forecasts job growth for all industries in the U.S. economy will be 10.1%. Research cites growing demand among employers for more flexible work arrangements as a driving force behind this expected growth in temporary help jobs.

Legal Update

In November, the U.S. Senate and House of Representatives passed an unemployment benefits extension package. The bill extends benefits by up to 14 additional weeks in all 50 states. It will further extend unemployment benefits for up to 20 weeks in states with a three month average unemployment rate of at least 8.5%. In order to pay for the additional weeks of emergency unemployment compensation, which has an estimated cost of $2.4 billion, the bill extends the .2% FUTA surtax on employers through all of 2010 and the first six months of 2011. All employers can expect SUI taxes to increase significantly in 2010.

Sources: Greater Houston Partnership, American Staffing Association

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March 2010

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